The Consumer Finance Protection Bureau has made it clear that even individual loan officers are not immune from enforcement actions. Earlier last year, the CFPB entered Consent Order against a former loan officer, David Eghbali. Eghbali worked at separate times for Wells Fargo and Bank of America. The CFPB fined Eghbali $85,000 and banned him from “participation in the Mortgage Industry in any professional capacity for one year” related to alleged violations of the Real Estate Settlement Procedures Act (RESPA).
Section 8 of RESPA prohibits kickbacks or referral fees by making it unlawful to give or accept any thing of value pursuant to an agreement or understanding that real estate settlement service business involving a federally related mortgage loan be referred to any person. 12 U.S.C. § 2607(a). RESPA further provides that “[n]o person shall give and no person shall accept any portion, split, or percentage, of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed [and the other exemptions provided in § 8(c)].” 12 U.S.C. § 2607(2).
According to the Chrisman Report, the CFPB alleged that from between 2013 through 2015 Eghbali had an agreement with the escrow company, New Millennium, which would allow him to manipulate the prices his customers would pay for escrow services. New Millennium would reduce its fees for some of Eghbali’s customers and make up for its loss by adding fees to loans for other customers. This, per the CFPB, ultimately increased the number of loans Eghbali closed, boosting his commissions at the consumer’s expense.
This should be taken as a shot across the bow for individual and small companies that believe they are too small for the CFPB to bother bringing an enforcement action against them.
Elley Law PLC is experienced in all aspects of CFPB enforcement, audit, and related regulatory actions. You can reach the office at (480) 788-4529 or Rich Elley directly at firstname.lastname@example.org.